25 Easy Ways to Improve Cash flow Now & Relax

Vet the people you sell to – do credit checks

LISTEN LISTEN LISTEN when signing up a new person – what are they looking for in this deal and why? How will their expectations affect your business and cash-flow?

Ask the hard questions about their cashflow – IT WILL AFFECT YOURS

Investigate using a middle man to reduce sales volumes and change the cash dynamic – especially if your target market are notoriously bad payers (using government  agencies can be great for this)

Have a pipeline and back-up relationships – don’t get stuck because your biggest payer/donor/grant has just shut-up shop or gone elsewhere

Enure someone has regular debtor contact – once a debtor is overdue resend the invoice and contact per overdue schedule – every 15 days. For regular late payers send a courtesy mail pre-due date.

Empower staff to resolve client and customer issues FAST – people generally don’t want to be annoying, and if there is a real issue then GET IT RESOLVED (don’t avoid it as that doesn’t help you or the other person)

Motivate your sales and delivery staff to decrease customer issues – happy customers pay on time

Ensure your Sales people are well briefed on your payment terms and check they advise everyone properly as part of their spiel – this will decrease issues post sale

Staff bonuses and incentives don’t have to be paid as cash! – get creative as to how to motivate staff in non-financial ways and preserve your cash flow

Use the most up-to-date systems and resources for accepting money, have you got Paypal?  Afterpay? – regularly review what is available for best practice

Use a sales and debtor tracking system that is appropriate for your business – don’t try and keep ‘who owes what’ on the back of a scrappy piece of paper

Keep your accounts system up to date – process payments asap so you can easily see exactly what might be outstanding

Do a check of the bank and process payments BEFORE starting to chase outstanding amounts – everyone HATES incorrect debtors calls

Consider Debt Factoring –  selling your worst debtors to someone else for collection at least a small amount will come in the door immediately

Create clear payment rules in your Terms and Conditions and ensure every new person receives a copy

Re-send your payment terms regularly to all customers – emailing this along with the bill really helps

Stick to the process – send out bills on time, follow them up on time etc. – if you waiver here then you are breaking your own terms and conditions AND setting a messy example for everyone else to follow

Motivate early payments – learn from Energy companies that now give us a discount when we pay on time!

Actively chase any non-complying debts – have a telephone script, email and letter for each stage of +30,+45,50,+60,+90 days and be consistent

Vet your suppliers – and regularly check you are getting the best prices

Negotiate better terms with suppliers, and review this annually – if your debtors are slow, match your credit days with your debtors days

Do the math re supplier discounts – make sure you are not getting a 5% discount that is costing you 15% to fund as it is going on the overdraft, or that a bulk discount will not be eroded by extra storage costs

Minimise your inventory – it is locking up your cash

Increase Inventory turnover ie Decrease the amount of time stock is sitting on the shelf ie refresh it more often